Exceptionally sturdy preliminary orders for Xiaomi’s YU7 electrical sport utility car despatched shares within the automotive newcomer to a file excessive on Friday and fanned hypothesis that Tesla could have to chop costs to battle again.
Within the first 18 hours after the YU7 went on sale, Xiaomi obtained some 240,000 orders that it considers locked in, with consumers having paid both a hefty deposit for ready-to-deliver vehicles or a smaller deposit for vehicles nonetheless to be made.
The smartphone and equipment maker made an enormous splash in China’s electrical car market with the launch of its first car, the SU7 sedan, in March final yr. The automotive has outsold Tesla’s Mannequin 3 in China on a month-to-month foundation since December and has even earned a rave assessment from Ford CEO Jim Farley.
The YU7 is simply its second mannequin and priced from 253,500 yuan ($35,360), it undercuts Tesla’s Mannequin Y by practically 4%. That can doubtless result in extra market share loss for the US automaker, analysts mentioned.
At one Xiaomi automotive showroom in Beijing, dozens of individuals have been gathered across the YU7.
Otto Shi, a 26-year-old Tesla Mannequin Y proprietor who works in finance, mentioned he was contemplating getting a YU7 for his father who at present drives a Mercedes-Benz.
“We might take turns to drive the Mannequin Y and YU7,” he mentioned, including that he was impressed by Xiaomi’s prowess in provide chains and the SU7’s success had made him imagine Xiaomi is the best Chinese language model to change to.
Xiaomi’s shares shot 8% larger in early commerce to an all-time excessive however later pared features to shut up 3.6%. They’ve risen by greater than 70% thus far this yr to worth the corporate at roughly $190 billion, making it the perfect performing large-cap inventory in Asia Pacific, in keeping with LSEG information.
What can Tesla do?
As home rivals more and more win over Chinese language customers with snazzy new options, Tesla’s share of the Chinese language EV market has fallen from a peak of 15% in 2020 to 10% final yr after which once more to 7.6% for the primary 5 months of 2025.
Citi analysts mentioned in a notice to shoppers that it might have to chop costs additional, supply its “Full Self-Driving” (FSD) driver help software program totally free and supply extra financing incentives whether it is to compete efficiently with Xiaomi.
Tesla, which counts China as its greatest market in keeping with first-quarter gross sales numbers, didn’t instantly reply to a request for remark. Final yr, China accounted for roughly a fifth of its income.
Whereas Xiaomi CEO Lei Jun acknowledged that Tesla’s driving help software program was superior, he touted a spread of different options the place he mentioned the YU7 outperformed the Mannequin Y.
The YU7’s base mannequin is supplied with a 96.3 kWh battery pack, providing a driving vary of as much as 835 km (519 miles) on a single cost and supporting high-power quick charging.
That compares with a most vary of 719 km for the redesigned Tesla Mannequin Y, which makes use of a smaller 78.4 kWh battery.
Its backseats have drawers for storage beneath them and the YU7’s driver help software program comes at no further cost whereas Tesla expenses 64,000 yuan for its good driving software program, he added.
On Thursday evening, Xiaomi mentioned it had obtained 289,000 orders for the YU7 within the first hour after it went on sale, greater than 3 times the extent for its SU7 when it launched.
Lei has mentioned, nevertheless, {that a} portion of orders was doubtless being positioned by scalpers. On Chinese language secondhand platform Xianyu, there have been tons of of individuals on Friday trying to promote their place within the order queue to others.
Aiming to mitigate such scalping, Xiaomi is now limiting every buyer to buying two vehicles at most.
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